USPTO ‘Trademark Bully’ Comments Reveal Small Business Headache

In response to a Freedom of Information Act (FOIA) request, the United States Patent and Trademark Office (USPTO) has released the public comments it received during its recent comment period on “trademark bullying.”

Trademark bullying is when large companies unfairly or illegitimately threaten small companies with legal action for purported trademark infringement. In most cases, small companies are unable to afford to defend their cause and drop their use of the trademark in question.

The USPTO released the comments in response to a FOIA request that was filed by a Falls Church, Va.-based patent and trademark attorney, Erik Pelton. Pelton posted the documents — 1,570 pages in all — on his blog.

The experiences of many of the small businesses claiming to have experienced trademark bullying were the same. They proceeded with their use of trademarks which their attorneys and their own research had deemed available for use and free from claims by others, only to be approached by larger organizations threatening legal action if they did not desist from the supposed trademark infringement.

One such company, called Wellness, which sells a line of children’s fitness programs and products, was approached by the Boston Red Sox after it began marketing a children’s exercise game called “Soxercise” used by YMCAs and other clients. Ultimately, the company submitted to the Red Sox request and stopped using the name “Soxercise.”

“Trademark bullying through monetary intimidation and legal threats not only limits potential development of numerous creative products and services much needed in all societies, but its misuse also allows [sic] affects free speech and the use of descriptive terms,” said the attorney representing Wellness, in a written statement to the USPTO .

In another instance, a company called Domains by Proxy revealed a series of letters from Miss Universe, LP, LLLP, threatening to sue over its ownership of the domain name MissNudeTeenUniverse.com.

Pelton, who so far, appears to be the only person who has granted the public access to the documents — even the USPTO has not posted them — is calling for a Senate hearing on the issue of trademark bullying.

“Our firm specializes in representing the interests of smaller businesses,” Pelton told BusinessNewsDaily. “We’ve been following the issue all along and believe there is an important discussion and debate to be had about whether this is a problem.”

Pelton believes the USPTO has obligation to protect all businesses — large and small — but believes small businesses are disproportionately affected by this issue.

He also said that changes to processes at trademark office to shorten the application and registration and dispute and appeals process would be helpful.

“It can take three to four years to litigate a dispute,” Pelton said. “During this time, the company being disputed is on hold and can’t invest resources in its trademark. Speeding up process would help businesses.”

Pelton also suggests there be penalties for trademark bullying.

“The trademark office and appeal board have no power to penalize or sanction company that takes advantage of process,” Pelton said. “There is little downside to being aggressive in going after small businesses with claims that may be bogus.”

Jeanette Mulvey

Jeanette has been writing about business for more than 20 years. She has written about every kind of entrepreneur from hardware store owners to fashion designers. Previously she was a manager of internal communications for Home Depot. Her journalism career began in local newspapers. She has a degree in American Studies from Rutgers University. Follow her on Twitter @jeanettebnd.